Reuters reported the following on June 5:

• Australia’s corporate regulator said on Friday it had launched a formal investigation into three KPMG Australia partners linked to whistleblower allegations the accounting firm misused confidential client data to win lucrative audit contracts.
• The Australian Securities and Investments Commission said it began a preliminary probe into KPMG in April and moved to a formal investigation after the resignation of the firm’s CEO and audit chief last week.
• …In March, ​Deborah O’Neill, a senator from Australia’s ruling Labor party, shared with parliament a whistleblower’s allegations of misconduct at KPMG. They included that confidential board papers from real estate company Lendlease were used to support bids for major audit tenders for Westpac, a large bank, and Dexus, a property firm.
• KPMG had conducted an internal investigation into the claims but failed to substantiate any misconduct. It has since engaged law firm Allens to conduct a new external investigation.
• Court said she had “deep concerns” over the alleged misconduct. But ASIC did not have powers to regulate the firm due to its partnership structure, only individual auditors, she said.
• ASIC CEO Scott Gregson added the corporate watchdog had also sought assurances from KPMG that no partners linked to the scandal were involved with the regulator’s own active contracts with the firm.
• KPMG ran a whistleblower service for the Reserve Bank of Australia under a contract that cost A$10,000 ($7,121) a year, the central bank’s Governor Michele Bullock said on Thursday.
• “I don’t think we’ll be reappointing them to the whistleblower service,” she said in a Senate committee hearing.
• A separate contract with KPMG for arranging foreign employee recruitment would also be re-tendered, Bullock said.

It had previously been reported that the aforementioned firm Dexus said it wouldn’t allow KPMG Australia’s chief operating officer to “be the signing partner – the registered auditor who attests that a company’s financial results reflect a true and fair view of its financial performance – for its 2025-26 accounts.” While Dexus at the time of writing (and this is one of those fast-moving cases where a post may already be a little outdated by the time it’s posted and read) hasn’t yet put its audit out to tender, the other company mentioned above, Lendlease, already took that step. Among other reported consequences:

• The federal government holds dozens of active audit contracts with KPMG worth a combined $27.4 million across multiple departments, according to the government’s own AusTender procurement portal… Beyond the audit contracts, the federal government will put more than $270 million in total KPMG contracts under scrutiny as a growing data-misuse scandal threatens to engulf the professional services industry. The Department of Finance has formally declared the crisis a “significant event.”
• (An Australian government official) stated the “severity of the allegations has prompted him to revisit stalled recommendations to overhaul partnership structures. Those recommendations include capping partner numbers at 400 and bringing major firms under the Corporations Act to grant ASIC enforcement powers over entire entities.”

Well, if nothing else, we can agree it’s been a suboptimal year for the KPMG brand. The events above of course unleashed a torrent of commentary. Taking one almost at random:

• “Integrity is not a communications strategy. It is a leadership strategy.”
• The lesson from the KPMG scandal is not simply about one CEO resignation.
• It is about a much larger issue confronting corporate Australia.
• Trust is becoming the defining currency of leadership.
• The organisations that will thrive over the next decade will not necessarily be those with the biggest budgets, the strongest brands or the fastest growth.
• They will be the organisations that create environments where people can speak up.
• Where concerns are investigated properly.
• Where accountability exists before exposure.
• Where governance is viewed as a strategic asset rather than a compliance exercise.
• Where integrity is embedded into decision-making rather than added to annual reports.

The key point almost suffocates there from an overdose of piety. A more concise commentary along the same lines:

• The question for leaders is not whether workplace concerns will arise. Every organisation experiences challenges from time to time.
• The more important question is whether your people have the confidence to raise them, and whether your business is equipped to respond effectively when they do. Because if people don’t feel safe to raise issues internally, they often don’t disappear. They escalate to The Fair Work Ombudsman, regulators, lawyers, and sometimes the front page of the newspaper.

Well, it’s a long-established maxim that it’s often not the crime that takes you down, it’s the cover-up. I suppose one could point out that the findings don’t directly go to the quality of KPMG’s audit work, and that it’s sometimes tempting to think that an exposed and appropriately reformed sinner may be more reliable going forward than someone who never publicly tripped up in such a manner. But leaving such frail attempts at balance aside, there’s something rather breathtakingly arrogant about helping oneself to clients’ confidential information for the sake of broader personal advantage. While the current scandal may warn people against that specific transgression, I fear the audit profession’s well-documented pressures and challenges will continue to fuel internal short cuts and compromises of various kinds, whether or not they come to public attention…

The opinions expressed are solely those of the author.